The Krugman Fix

The stimulus isn't working! Must . . . have . . . more . . .

By

James Taranto

Updated July 10, 2009 12:01 a.m. ET

Best of the Tube Tonight We're scheduled to appear this evening on CNN's "Lou Dobbs Tonight" as part of a political roundtable. The hourlong program starts at 7 p.m. ET, with a repeat showing at 4 a.m. ET, and the roundtable is usually in the latter half hour.

The Krugman Fix The economy is in recession, unemployment is rising, and some on the left, including former Enron adviser Paul Krugman, think the solution is massive new federal spending--a "stimulus" bill.

No, our column has not gone into summer reruns. Congress passed the so-called stimulus in February, and Krugman, writing in today's New York Times, wants another one. "The bad employment report for June made it clear that the stimulus was, indeed, too small."

Of course, there is another possibility. Perhaps the harms caused by massive new government spending outweighed the benefits, so that the stimulus didn't help or even made matters worse. As Time magazine noted back in January:

How do you stimulate a stumbling economy? For decades, the consensus among economists was that this was a job best left to the Federal Reserve and to such automatic fiscal stabilizers as unemployment insurance. Passing laws in Congress to cut taxes or boost spending to stave off a downturn was seen as pointless at best. Such help would arrive too late or in the wrong place, the thinking went, or would have no impact at all.

That consensus has unraveled in the face of the current recession, which appears likely to be the worst in the U.S. in three-quarters of a century

Maybe the old consensus was right, and the great unraveling was a mistake. Krugman, however, dismisses the argument as conservative ideology, and therefore false a priori:

For the past 30 years, we've been told that government spending is bad, and conservative opposition to fiscal stimulus (which might make people think better of government) has been bitter and unrelenting even in the face of the worst slump since the Great Depression. Predictably, then, Republicans--and some Democrats--have treated any bad news as evidence of failure, rather than as a reason to make the policy stronger.

Help us out here: If bad news is not evidence of failure, what possibly could be?

Podcast

Krugman opines that it is "reasonable for administration economists to call for patience, and point out, correctly, that the stimulus was never expected to have its full impact this summer, or even this year." That would be news to anyone who listened to President-elect Obama back January:

We are still the nation that has overcome great fears and improbable odds. If we act with the urgency and seriousness that this moment requires, I know that we can do it again.

That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.

It's a plan that represents not just new policy, but a whole new approach to meeting our most urgent challenges. For if we hope to end this crisis, we must end the culture of anything goes that helped create it--and this change must begin in Washington.

Obama's suggestion that a $787 billion spending package was a way to end Washington's "culture of anything goes" was something of a head-scratcher even then. But Krugman's call for yet another massive stimulus is even harder to make sense of. He draws an analogy to the use of monetary policy to stimulate the economy:

When there's an ordinary, garden-variety recession, the job of fighting that recession is assigned to the Federal Reserve. The Fed responds by cutting interest rates in an incremental fashion. Reducing rates a bit at a time, it keeps cutting until the economy turns around. At times it pauses to assess the effects of its work; if the economy is still weak, the cutting resumes.

But a $787 billion spending package, followed by another of unspecified but presumably comparable immensity, is hardly "a bit at a time." The situation is more like that of a drug addict who develops a tolerance and keeps needing a bigger and bigger fix. Or, to quote Krugman's colleague Bob Herbert, "Instead of cutting our losses, we appear to be doubling down."

Two Presidents in One!

"If we do not move swiftly to sign the American Recovery and Reinvestment Act into law, an economy that is already in crisis will be faced with catastrophe."--President Obama on his soon-to-be-passed stimulus proposal, Feb. 5

"I never believe anything is do or die."--President Obama on his legislatively imperiled health-care proposal, July 10

OK, Buddy, Where's the Ire? We were puzzled when a reader sent us an article from the Christian Science Monitor bearing the following headline "Risking Israel's Ire, US Takes 1,350 Palestinian Refugees." The subheadline explained:

The US is generally reluctant to resettle Palestinians, but these are refugees from Iraq who have been targeted since the invasion.

The article goes on to explain that the Palestinians in Iraq, who were "treated well under [Saddam] Hussein," have been "targeted by Iraqi Shiites," and it says that "some critics" in America oppose allowing pro-Saddam Arabs to immigrate--although the only such critic quoted is anti-immigration activist Mark Krikorian.

What got our attention, though, was the bit in the headline about "Israel's Ire." What reason could Israel possibly have to object to this humanitarian gesture? As it turns out, the article offers no evidence whatever of the imputed Israeli irefulness. Author Patrik Jonsson has no quotes from Israeli officials, and the only passage that even remotely touches on an Israeli position is this:

The US reluctance to accept Palestinians is because it "doesn't want the refugee program to become an issue in its relationship with Israel," says a diplomat in the region, who requested anonymity because he is not cleared to talk to the press. But these Palestinians, he says, will be processed as refugees from Iraq.

Note what the anonymous diplomat does not say. He does not say that the decision to admit Palestinians from Iraq is likely to arouse ire, or any other reaction, from Israel. In fact, he distinguishes "these Palestinians" from those residing in the disputed territories for the purpose of his statement about refugee policy and U.S.-Israel relations.

Moreover, he doesn't say that the Israelis would object to America's admitting Palestinians from the territories as refugees. Maybe they would, but it's hard to see why. The presence of a large population of Palestinian "refugees"--whom Arab countries (except Jordan) refuse to resettle--is a problem for Israel.

Thus, as Seth Lipsky has argued, Palestinian immigration to the U.S. would be very much in the Jewish state's interest. If the U.S. "doesn't want the refugee program to become an issue in its relationship with Israel," maybe it is because it doesn't want to be pressed into admitting more Palestinians.

In any case, the notion that America is "risking Israel's ire" by admitting Palestinians from Iraq seems to be a figment of the imagination of whoever wrote the Monitor's headline.

Reuterville's Got 'Style' These guys must be gluttons for punishment. Dean Wright of Reuters, who carries the unwieldy title "global editor, ethics, innovation and news standards," reports that the "news" service has made its stylebook, the Reuters Handbook of Journalism, available to the world online.

We looked for the entry on "scare quotes," but there wasn't one. The "quotations" entry doesn't mention the subject either. (It does, however, ban dowdification--"Quotes are sacred. Do not alter anything put in quotation marks other than to delete words, and then only if the deletion does not alter the sense of the quote"--though with this exception: "Delete routine obscenities.")

Finally we turned to the "terrorism" entry, and there it is ("inverted commas" is a Britishism for quote marks):

We may refer without attribution to terrorism and counter-terrorism in general but do not refer to specific events as terrorism. Nor do we use the adjective word terrorist without attribution to qualify specific individuals, groups or events. Terrorism and terrorist must be retained when quoting someone in direct speech. When quoting someone in indirect speech, care must be taken with sentence structure to ensure it is entirely clear that they are the source's words and not a label. Terrorism and terrorist should not be used as single words in inverted commas (e.g. "terrorist") or preceded by so-called (e.g. a so-called terrorist attack) since that can be taken to imply a value judgment.

Hmm, seems to us Reuters is less than rigorous in applying that last rule.

Meanwhile, we're trying to figure out how this New York Times story got past the copy editors:

Al Qaeda's affiliate in North Africa has carried out a string of killings, bombings and other lethal attacks against Westerners and African security forces in recent weeks that have raised fears that the terrorist group may be taking a deadlier turn.

American and European security and counterterrorism officials say the attacks may signal the return of foreign fighters from the Iraq war, where they honed their bomb-making skills.

Under Times style, al Qaeda in Mesopotamia is "a homegrown insurgent group." So what would its fighters be doing in North Africa?

On Thursday, Specter's campaign sought to bring into question Sestak's roots to the Democratic Party. Specter's campaign sent out a list of Sestak's voting history in Delaware County, which the senator's campaign said showed that Sestak registered as an Independent in 1971, didn't vote in any primary elections from 1971-2005 and that he officially registered as a Democrat in February of 2006. Sestak was elected as a Democrat to the House in 2006.

As family therapist and educator SaraKay Smullens, whose family counts Specter as a friend although it "does not see him often," notes on the Puffington Host, Specter was a Democrat when he was elected Philadelphia district attorney in 1966. Back then, Sestak wasn't even registered to vote! All in all, there is little doubt about Specter's party loyalty.

Why Palin's Bailin' On Monday we invited members of Facebook's Fans of Best of the Web Today group to discuss our explanation for Sarah Palin's resignation. Here are some of the arguments made by those who thought we were wrong (we've edited them slightly for spelling and style):

Dan Loomis: "If her reason for resigning is mainly to protect her family, I don't see how that would be accomplished if she still intends to place herself on the national stage (as it would seem she is: "make a positive difference and fight for all our children's future from outside the Governor's office?"). . . . Now, fair or not, she's going to be labeled a quitter, and if she reappears on the national stage, the attacks will of course continue, and she'll have failed in protecting her family."

Michael Hussey: "Instead of ignoring the idiot David Letterman, she sought to stoke the fire and exploit the situation for political gain, exhibiting a continuing pattern of fostering resentment. If you doubt me, watch the Matt Lauer interview and look at the smile on her face she tries but cannot hide."

Elizabech Eccher: "If she's resigning because of her family, then why the frack doesn't she come out and say that instead of rambling on ad nauseam like a speed freak?"

A good answer to most of these objections comes from Stanley Fish, writing on the New York Times Web site:

It was generally agreed that because the statement was structurally chaotic, even formless, Palin had written it herself. No self-respecting political operative would have produced something so badly crafted. One would have thought that this would be seen as evidence of the absence of calculation, but instead it was received as evidence of her Alaska-limited understanding of politics. (Doesn't she know, they asked, that resigning is no way to run for president?) Rather than reasoning from what they took to be the political ineptitude of her performance to the possibility that it wasn't political, they just continued on their merry, muckraking way. . . .

So what's the bottom line story? Simple. . . . Palin is in pain. Sometimes what it seems to be is what it is.

Why would anyone think that Palin's declaring she intends to remain in public life, failing to ignore David Letterman's lewd joke about her daughter, smiling (perhaps nervously) during a TV interview, and "rambling on ad nauseam" is inconsistent with our explanation that she resigned because of the abuse that has been heaped on her children? People who have reached an emotional breaking point do not typically behave in neat and consistent ways.

Olan James offers this comment:

Gov. Palin should have . . . thought this all through before deciding to run for governor. Perhaps family priority number one should have been, "Don't get pregnant." . . . Family priority number two probably should have been, "Don't run for national office." I adore Gov. Palin and voted for her with enthusiasm, but at her point in life deciding to accept the Republican nomination for Vice-President was terribly unrealistic. The fallout from that decision has, no doubt, been devastating to her and her family. Still, it could have been avoided by declining the nomination.

This argument is fair up to a point, but no one could have been expected to anticipate that a major television network would air "jokes" about Palin's daughter being sexually violated or promiscuous, or that people would feel free to opine that her infant son and grandson never should have been born. Palin's foes displayed an ugliness that is as surprising as it should have been shocking.

Hacking the Norks Reader Evan Slatis offers the following answer to what we thought was a rhetorical question about how a cyber-attack from North Korea could have originated anywhere other than in the Pyongyang regime:

There are two realistic possibilities for this.

1) IP spoofing. Basically, the packets of data sent over give a different address from where they were actually sent from. Probably not this, though, since they should be able to trace the packets back to some source, regardless.

2) The few countries which have actual relations with N. Korea might have used their servers as proxy servers (i.e., they routed the traffic through their servers). The Norks might not have even been informed, and certainly wouldn't care and wouldn't give up who actually did it.

There is also the possibility the Norks' servers were hijacked first (this happens quite a bit for zombie spam servers), and the Norks didn't even know they were being used. For all we know (given what I've read in the papers), it's just a bunch of hackers just screwing around. The Norks aren't exactly known for their technological prowess.

At Least He's Modest "Marion Barry: I Did Nothing to Deserve My Arrest"--headline, FoxNews.com, July 9

Sarah Palin is a rather sad, empty and unimaginative person of little real long term importance. Personally she does not matter much to me. . . .

So tell me. Why should we care about the sad spectacle that Sarah Palin is making of herself? Should I add Governor Mark Sanford?

Between that opening and that closing are 7&frac12; lovingly constructed paragraphs--995 words in all, not counting footnotes--about Sarah Palin. We never thought we'd say this, but Ann Coulter has a gift for understatement.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.